Credit Unions And The Gift Of Financial Wellness

Debt management mixes with the financial cooperative ethos in a year-round campaign for financial health.

Give a man a fish and he’ll eat for a day. Teach him to fish and he’ll eat for life. That old saying captures the essence of the two-pronged approach many credit unions take to the financial well-being of their members.

Take for example Wright-Patt Credit Union ($4.3B, Beavercreek, OH), which is in the midst of a lending promotion titled Refi Your Ride and a money management campaign titled Making Getting Ahead of Debt A Little Easier.

The refinance promotion offers immediate financial relief through the holidays via a 1% rebate and a 90-day payment deferral.

Tracy Szarzi-Fors, Vice President of Marketing & Business Development, Wright-Patt Credit Union

Members don’t want to go into debt during the holidays, Tracy Szarzi-Fors, vice president of marketing and business development, says of the seasonal auto loan offer. This promotion encourages them to lower their monthly payments and put a little extra money in their pockets for the holidays.

The debt management coaching, meanwhile, takes a longer view but uses the holidays as a springboard for long-term success in household budgeting. According to Szarzi-Fors, it was inspired by a conversation she had with a call center staffer one fall day a few years ago.

She told me they were already getting calls for signature loans for the holidays and that the average amount requested was $5,000, the WPCU marketing chief says. That blew me away. So, we created a campaign to help them stay ahead of debt during the holidays.

Click the tabs below to view images.

GETTING AHEAD OF DEBT

Wright-Patt’s marketing department produced this two-page placemat that describes the credit union’s holiday debt management program. Click here to see Wright-Patt’s Getting Ahead of Debt placemat.

REFI YOUR RIDE

Wright-Patt’s vehicle refinance rebate offer can put a bit of extra cash in the member’s pocket for the holidays. Click here to see Wright-Patt’s Refi Your Ride promotional collateral.

Kathy Breaux, Consumer Lending Director, The New Orleans Firemen’s Federal Credit Union

Holiday Help For Financial Fires

The New Orleans Firemen’s Federal Credit Union ($168.0M, Metairie, LA) also offers special loans and counseling to help members during the holidays and beyond.

The Crescent City credit union has been offering a holiday signature loan that requires six months of employment and direct deposit but no underwriting. The note can be up to $1,500 for 12 months at 15%. In the past four years, NOFFCU has made 3,933 of these loans, totaling $5.6 million.

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They go over pretty well, says Kathy Breaux, the credit union’s consumer lending director. Our members call for it. They wait for it every year.

But the credit union doesn’t just dispense money. It’s also ready with advice.

Ann Solomon, Director of Strategic Initiatives, Inclusiv

When we talk to members about the loans, we also let them know about our financial counseling program, Breaux says. We offer to help them with their budget, to help them create a savings plan and set aside money for school supplies and all those things you can expect every year.

NOFFCU also tries to be there to help with the unexpected. The 25,000-member credit union, which serves multiple SEGs and parishes, offers a Rescue Loan as a payday lending alternative. The $300 or $500 loans are for 60 days maximum at 15%.

NOFFCU has made 1,866 of them in the past four years for a total of $669,600.

Gigi Hyland, Executive Director, National Credit Union Foundation

The Louisiana credit union also is working with a Baton Rouge hospital, community improvement organization, and Catholic Charities to offer another alternative loan through the new Faith Fund. Those loans can be up to $1,500 for 12 months at 5.99%.

The Gift Of Financial Wellness

The holidays are a big time for personal loans but not a big time for financial education and counseling, says Ann Solomon, strategic initiatives director at Inclusiv, the recently re-named National Federation of Community Development Credit Unions.

Solomon says data from the 16 credit unions participating in her organization’s Pathways to Financial Empowerment data analytics program show a December-January dip in counseling sessions then a rebound in February and March when the bills come due and tax time arrives.

3 Tips ForHoliday Help

Gigi Hyland, executive director of the National Credit Union Foundation, suggests ways to spread holiday cheer.

  1. Start With Employees Foster the holiday feeling among employees with a savings contest or a toy collection.
  2. Acknowledge The Blues The holidays are tough. Show members you’re there for them with resources like a Christmas Club account that help them sock away money by gift-buying time.
  3. Take Time To Celebrate Thank members for being members and show whatever good will the credit union can extend.

Of course, financial wellness is a year-round concern, so it’s a good idea to talk with members about how to build financial security when they take advantage of holiday loans or savings programs.

While you’re getting the word out about your offerings, encourage folks to think about planning for next year, Solomon says. Align that holiday energy with your products and the support you can give them.

Financial wellness is a 24/7/365 issue, but holiday stress puts the issue in stark relief.

We know the economy appears to be doing well, but credit unions know the struggle many face, says Gigi Hyland, executive director of the National Credit Union Foundation.

Hyland urges cooperatives to put their creative minds to work to come up with products and promotions that save members money and show them a path to better money management.

What better time of year than this to celebrate being a cooperative? says the NCUF director and former NCUA board member. And what better way to celebrate than by recognizing members might be struggling and finding creative ways to meet them where they live?

 

November 4, 2019

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